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Precarious market
yields mixed results
NEW YORK >> Stocks were mixed yesterday as investors sought a direction for the market after a major selloff the day before. The Dow Jones industrials closed higher, while technology stocks fell for a third straight session.
Investors wrestled with how to view Wednesday's 141-point drop in the Dow -- as a buying opportunity or a sign of a market correction -- and how the Federal Reserve's changing stance on interest rates would factor in.
"The market is on a precarious perch right now," said Bryan Piskorowski, market commentator at Wachovia Securities. "Fundamentals are definitely robust, but there's always the question of how robust they'll be down the road. That's the question people are making their bets on."
The Dow was up 41.92, or 0.4 percent, at 10,510.29 in heavy trading as many investors searched for bargains.
Broader stock indicators were mixed. The Standard & Poor's 500 index was up 5.63, or 0.5 percent, at 1,134.11, and the Nasdaq composite index finished down 9.14, or 0.4 percent, at 2,068.23. The Nasdaq has lost 85.60, or 4 percent, since Monday's close.
The price of the Treasury's 10-year note closed up 1/32 point, while its yield held steady at 4.19 percent. Two-year Treasury notes rose 1/32 point and yielded 1.79 percent, down from 1.82 percent Wednesday.
Many on Wall Street hoped the Fed's interest rate statement, and the selling it sparked, was an excuse to lock in profits rather than the beginning of a larger selling trend, especially given the economy's overall health and the strength of recent earnings reports.
"The Fed has shown that they have no desire to make a pre-emptive rate increase," said Jeff Swensen, senior trader at John Hancock Funds. "They want to see actual inflation before they raise rates, and that helped the market feel better about buying again."
But the trading volatility that marks most earnings seasons persisted, despite nearly two-thirds of the S&P 500 companies beating analysts' expectations.
"We definitely had a big sell-off (Wednesday) that feels a bit overdone," said Peter Dunay, chief market strategist at Wall Street Access. "It's the craziness of expectations. We had very strong earnings, but that was already built into the market. If there is a pullback, it will temper expectations and let the economy, which is pretty strong, catch up to the expectations."
New economic data from the government did not provide a clear picture of the pace and health of the recovery. First-time jobless claims for the week fell by 1,000 to the lowest level since the end of December. However, wages and benefits grew by only 0.7 percent, the lowest monthly rise in a year. Wall Street was looking ahead to today's gross domestic product figures and next week's January payroll data for a better read on the overall economy.
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